Aging and pension reform: extending the retirement age and human capital formation*

Edgar Vogel, Alexander Ludwig and Axel Börsch-Supan

Journal of Pension Economics and Finance, 2017, vol. 16, issue 1, 81-107

Abstract: Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere. Conventional wisdom suggests that this will increase capital intensity with falling rates of return to capital and increasing wages. This decreases welfare for middle aged asset rich households. This paper takes the perspective of the three demographically oldest European nations – France, Germany and Italy – to address three important adjustment channels to dampen these detrimental effects of aging in these countries: investing abroad, endogenous human capital formation, and increasing the retirement age. Our quantitative finding is that endogenous human capital formation in combination with an increase in the retirement age has strong implications for economic aggregates and welfare, in particular in the open economy. These adjustments reduce the maximum welfare losses of demographic change for households alive in 2010 by about 2.2 percentage points in terms of consumption equivalent variation.

Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Working Paper: Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation (2015)
Working Paper: Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation (2013)
Working Paper: Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation (2013)
Working Paper: Aging and pension reform: extending the retirement age and human capital formation (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:16:y:2017:i:01:p:81-107_00

Access Statistics for this article

More articles in Journal of Pension Economics and Finance from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().